REFORM OF MICHIGAN WORKERS’ COMPENSATION LAW
HB 5002; Senate bill not yet given a bill #
Updating the Michigan Workers’ Disability Compensation Act
RIMS POSITION:
RIMS supports and seeks advancement of legislation to remedy current problems in the
Michigan Workers Disability Compensation Act.
While HB makes many much needed reforms, RIMS is focused on the following three changes:

Clarification of law pertaining to joint replacement or implant procedures

Needed reforms to the definition of “disability”

Tightening and clarification pertaining to the “100 week rule.”
BACKGROUND ON CHANGES TO SEC 361(2).
Michigan is a “wage loss” state, rather than an impairment rating state for workers’
compensation benefits. Under Michigan law, if an employee returns to work, the wage loss
benefits are stopped or reduced based upon wages earned subsequent to the disability. Also
under current law, an employer is entitled to reduce the workers’ compensation benefit on
account of receipt of other benefits such as pension benefits.
Employees who suffer a work caused amputation get special treatment so that if an employee
suffers the loss of a leg, he is entitled to 215 weeks of wage loss benefits whether or not he is
earning wages. Also, his gets to avoid the impact of coordination of other benefits such as a
pension.
The language of the specific loss provision of Michigan law has not kept pace with medical
science. This has resulted in distortions of the law for employees who have undergone certain
medical procedures. In Trammel v Consumers Energy, 2009 ACO 126 an employee who missed
only 3 months of work for a knee replacement, returned to work and worked until he took his
retirement, was granted workers' compensation benefits that were intended for amputation
victims. This decision has made Michigan the laughing stock of the medical community.
Trammel v Consumers Energy, 2009 ACO 126.
Michigan law needs to be changed in order to keep pace with medical science. Knee
replacement surgery is not the equivalent of loss of the leg.
RIMS supports addition of the following language to MCL 418.361(2) “The effect of any joint
replacement surgery, implant, or other medical procedure shall be considered in determining
whether a loss has occurred. The disability period for the loss shall be considered as follows:”.
The provision continues with the same schedule of loss currently in the statute.
BACKGROUND ON CHANGES TO SEC 301, the definition of disability.
Workers’ Compensation was never intended to be a substitute for a pension or a subsidy for a
lifestyle choice. But Michigan’s wage loss law provides absolutely no incentive to the employee
to return to work. The Michigan Supreme Court decision in Stokes v Chrysler LLC, 481 Mich
266; 750 NW2D 129(2008) arose out of the frustration of employers seeing employees sit it out
because they can. The Lofton v Autozone, Inc., 482 Mich 1005, decision carries the Stokes
concept to employees who are partially disabled. Partially disabled employees retain the ability
to earn wages, although less than the amount earned before the injury.
The proposed changes to the definition of disability in 301 require the employee to actually seek
employment. The employee will not be rewarded for sabotaging a return to work. This is done
by measuring the employee’s wage loss by what he or she is capable of earning rather than what
he or she actually earns.
These concepts are contained in current Supreme Court decisions but need to be codified in the
statute in order to create stability in the law and prevent alterations based upon the composition
of the Supreme Court. RIMS supports the codification of the current definition of disability by
means of the changes proposed in HR 5002.
BACKGROUND ON CHANGES TO SEC 301(7), the 100 week rule.
Employees who are disabled and who have been provided with a job by their former employer or
another employer can sabotage that employment by bad behavior. The current law requires that
the full workers’ compensation benefit be reinstated to an employee who has been employed for
less than 100 weeks and who loses his job “for whatever reason”. Thus, the current law compels
even the most conservative magistrates to award benefits to an employee who sabotaged his
return to work by “improperly touching” the derriere of a business colleague. Bauman v Bottling
Group LLC, 2008 ACO No 271.
The proposed changes to the law prevent this from happening. It provides that an employee who
is terminated from reasonable employment “for fault of the employee” shall be considered to
have voluntarily removed himself from the workforce and is no longer entitled to wage loss
benefits.
RIMS supports the changes proposed in HR 5002. The current law needs to be changed to
ensure that bad behavior, which undermines the entire workplace, is not rewarded.